Buying a Bank Owned Property... frustration

[forgeblast]

A buddy of mine wanted to buy his neighbors house, since it was right next to his farm and his son would be able to watch the farm. he called and called and then found out the bank sold the property to someone else, he was able to track down the "someone else" and was able to buy it. the property someone else bought for 12k my friend paid 18k, 2 days after the other person bought it. There are a lot of shady things out there.

 

[dmccarty]

Long story short. I hope.

We knew of a house that was 75-80% built and and behind on payments. It was very likely that the house would get foreclosed.

We talked to at least two lawyers about buying the house. Our options were to buy before the house went to the court house or wait until foreclosure.

Because the house was not finished the house could/should have mechanics liens which, if we bought before foreclosure, we would/could be liable. After foreclosure it would not be our problem.

There is MUCH more to the story but that is the gist of it. In the end we walked away from a variety of reasons. Which I think was the right decision. On the other hand, someone else bought that house and are the nearest people to our house. They have ticked off everyone in the neighborhood.....

Later,
Dan

 

[middleaged]

Mortgage foreclosure insurance ... it has to go thru the process so the lender can collect on the insurance to recap the loss and then they can sell it.... thats what I have been told.

I recently did a real estate auction for the lender ... they needed $250K the last bid was $227K they declined paid my fee's and expenses ... then I was told the foregoing by the lenders rep. It appears to be a win win for the lender.

This is absolutely correct. Most residential mortgages are secured by GSE's such as Fannie Mae, Freddie Mac, VA, USDA, or FHA. Let's say a homeowner gets a mortgage for $100K on a $125K property, value drops to $80 and owner walks for whatever reason, bank forecloses, and buy it at sheriff auction for $50. They are in the hole for $100K (what was owed), not what they spent at the sheriff sale. In order to receive the $100K from one of the GSE's, they have to market it according to the terms of the GSE. Fannie is different than Freddie, VA is different than USDA, etc.

I guess the point I am trying to make is that is isn't necessarily the banks fault. It's also not the banks fault the property is in foreclosure. I cringe when I hear that a homeowner gives a property back to a bank. The homeowners don't "give it back" to the bank, they give it to them instead of paying back the money the bank gave them to start with.

I do not own or operate a bank...I do work wth foreclosure properties, both for banks and for property owners.

 

[clemsonfor]

We had a bit of a problem with wells, they were worried that the value of the property would be tied up in the land since its 20 acres, big pain dealing with them.

You need to finance lang through farm bureau or agsouth or someone. Yea they are higher sometimes but i have heard they do land deals easy.

 

[Soundguy]

I hea rya.

The first house I built is now vacant. i sold it? in 99 or so to a guy I worked with.. he left work a few years later, along the way I heard that in the beginning og 11 he moved out and turned the house over to the bank ( chase ). I figured it might be kinda neat owning my old house again.. sent a letter to chase about it. neary a reply.. and runaround from phone calls.

banks DO NOT want to sell properties apparrently..

i have -0- sympathy for any bank problems i hear about.. failing banks or whatever. they are doing it to themselves with pirate like tactics trying to manipulate the market.. etc. no sympathy whatsoever for them...

soundguy

My neighbor gave his home back to the bank... prices are down about 65%... ethics aside... he was paying almost 10k per month... his loan $9000 + taxes of $1500 + another $300 for insurance...

Got to thinking I should look into making an offer because the land adjoins my land on one side and my parents on the other...

Spoke with the agent handling the property for the bank... they will not except offers till the property is vacant... could be another year due to California Laws and delay tactics... then the bank needs to inspect and the property has to be marketed to owner occupied buyers only...

Each buyer must be pre-qualified with Wells Fargo in order to make an offer... the buyer doesn't have to use Wells Fargo... they must go through the application process...

I told the agent I would be willing to make an all cash offer as-is with one condition... I pay for a survey so I know the exact boundaries... there are or have been encroachment issues...

I'm thinking Banks are really not interested in selling property/closing the books... if they were... why would they require a cash offer to go through loan approval???

The former owner and current occupant has lived their almost 30 months since they stopped paying the mortgage... he had several long drawn out loan mod negotiations where he had to be so many months behind before they could initiate the process...

 

[ultrarunner]

I guess the point I am trying to make is that is isn't necessarily the banks fault. It's also not the banks fault the property is in foreclosure. I cringe when I hear that a homeowner gives a property back to a bank. The homeowners don't "give it back" to the bank, they give it to them instead of paying back the money the bank gave them to start with.

I do not own or operate a bank...I do work with foreclosure properties, both for banks and for property owners.

In California... the only recourse on a purchase money first mortgage on an owner occupied home is the property... the only downside to the buyer is trashed credit...

A lot of folks would literally mail the keys to bank and move out... in other words walk away.

The last year or so... owners are using the legal system to delay pocession and cash for keys is very prevelent...

Also... some lenders pubically do not want a vacant home... way to many copper thefts and vandelism...plus code complicance used to give banks a pass... now they are holding the owner... now the banks responsible for blight, illegal activity and tacking on very high penalties if not quickly remedied... or having the work down and adding a municipal lean to the property...

 

[schoolsout]

banks DO NOT want to sell properties apparrently..


soundguy

If they sold those houses they had on their books, their "mark to fantasy" accounting gimmicks would be kaput. It's a shell game...it is why there are so many foreclosed homes still hidden from the market. They are hoping and praying that the Fed and Government can rob the taxpayers some more to help boost asset prices...

 

[Barnone]

Banks are only interested in one thing... money.

Duh, that is what they are suppose to do.

 

[schoolsout]

Duh, that is what they are suppose to do.

Some do God's work, too... :laughing:

 

[murphy1244]

This is absolutely correct. Most residential mortgages are secured by GSE's such as Fannie Mae, Freddie Mac, VA, USDA, or FHA. Let's say a homeowner gets a mortgage for $100K on a $125K property, value drops to $80 and owner walks for whatever reason, bank forecloses, and buy it at sheriff auction for $50. They are in the hole for $100K (what was owed), not what they spent at the sheriff sale. In order to receive the $100K from one of the GSE's, they have to market it according to the terms of the GSE. Fannie is different than Freddie, VA is different than USDA, etc.

I guess the point I am trying to make is that is isn't necessarily the banks fault. It's also not the banks fault the property is in foreclosure. I cringe when I hear that a homeowner gives a property back to a bank. The homeowners don't "give it back" to the bank, they give it to them instead of paying back the money the bank gave them to start with.

I do not own or operate a bank...I do work wth foreclosure properties, both for banks and for property owners.

Once you buy from a sheriffs sale all other claims are noll and void. I bought my house from one last year. Would not do it again for we were truly blessed and lucky to get what we did when we did.